Looking to take a long overdue vacation? Is working from home your permanent choice? Over the past few years, many Ontarians have had to re-evaluate their lifestyle and workplace choices. If you’re not planning on driving your car for a long period of time, you might wonder if you can put a temporary hold on your insurance. While most insurance companies do not allow you to temporarily suspend your insurance, they may allow you to temporarily reduce your coverage. In order to do this, you’ll need two Ontario Policy Change Forms to complete the process. In this article, we highlight the OPCF 16 & OPCF 17. When used in concert, you can temporarily put your insurance on hold and gain it back when you need to.
Reasons to put your insurance on hold
Many of us have had to adjust to the changes brought on by the recent pandemic. While there are many reasons why you may want to put your insurance on hold, COVID-19 is the top reason for the reduction in car use and travel. The work from home option has become attractive for many as of late. As has the savings in fuel and repairs that go along with less car usage. Some other reasons to suspend coverage are:
- You need to store your seasonal car
- You are travelling for an extended period of time
- Removing a less-used vehicle from your car insurance
- Your driver’s licence has been temporarily suspended
- The vehicle needs repairs and is no longer drivable
- You are recovering from an injury and cannot drive
Remember: Basic insurance coverage is better than having none or cancelling!
What happens if I put my insurance on hold?
In Ontario’s private car insurance system, you can put your auto insurance coverage on hold. However, it requires two Ontario Policy Change Forms – OPCF 16 & OPCF 17. Let’s discuss:
OPCF 16 is for “Suspension of Coverage.” It cancels your car insurance until it is reinstated. For that, you need a “Reinstatement of Coverage”, otherwise known as the OPCF 17.
Before you contact your isure representative about pausing coverage, there are a few things we should make clear. By suspending insurance coverage, you are giving up the four main components of car insurance protection:
- Third-Party Liability – If you hit someone’s property.
- Direct Compensation for Property Damage – Compensation for ‘not-at-fault’ accidents.
- Accident Benefits – Injuries sustained in an accident.
- Uninsured Motorist – Hit by someone that is uninsured.
Depending on your insurer, fees may also apply. Typically, there usually are no fees charged to add the OPCF 17 and remove the OPCF 16 from your policy. To learn more about these suspended coverages, click here.
What are the benefits of the OPCF 16 & OPCF 17 forms?
One of the mandatory costs of owning a vehicle in Ontario is auto insurance. Although you are not driving your vehicle as much, you still need to have insurance. This applies, even if you take it off the road and store it. Reducing your insurance coverage to comprehensive-only is often referred to as storage or seasonal insurance. Comprehensive insurance will protect your vehicle form fire, theft, vandalism, damage from falling items and bad weather. It offers the following benefits:
- You can limit your costs while you are not driving your vehicle.
- Your car is still protected from damages not related to an auto accident.
- You can avoid a gap in coverage, which can increase your rates.
- You can easily reinstate insurance coverage.
What are the downsides of cancelling my insurance?
There are many downsides to cancelling your insurance outright, here are just a few:
- It can end up costing you more money than you save when you need to get insured in the future.
- You may need to pay terminations fees.
- Gaps in coverage are also a potential red flag for insurers.
- When travelling, you’ll need to buy overpriced rental car insurance package to cover liability and personal accidents. This type of coverage found on your auto policy is not covered by your credit card.
- You must ensure the coverage is in place before driving again. Remember, you’ll be driving illegally.
- Your premium may go up; though most insurers won’t increase your rate. It’s still a good idea to clarify!
Instead, you can reduce your coverage to “parked car” or comprehensive-only with these endorsements.
FYI: Using the forms OPCF 16 and OPCF 17 for suspension and reinstatement, respectively, is suggested if you may be on vacation for a period of at least 45 days.
If you are still unsure about putting a hold on your insurance with the OPCF 16 & OPCF 17, there are other options. Instead of pausing, you can lower your limits or shop around. Speak with one of our isure representatives to help you save while still having coverage!